THUNDER BAY – POLITICS – On Monday night March 2, Council finalized the 2015 budget which now stands at 3.18% tax levy increase after taking into account the net growth in the tax base (new commercial building and new homes). While this is a vast improvement on the original 6.33%, it is still an increase over the 2.14% average of the last four years. If we add the water and wastewater increase, it becomes quickly apparent that all taxpayers but especially the low-income and middle-class families are feeling the pinch and are telling Council that they cannot afford it anymore.
The chart below tells a compelling story and validates the sentiment. I call this the Affordability Index as it compares the tax plus water increase as a percentage of household income, and as it can be seen, we are now trending above provincial average and cities with a population of over 100,000. To put this into perspective, Thunder Bay was below provincial averages in 2010, so the jump is the result of mainly a substantial increase in water and wastewater rates. The chart also does not include the 2015 increase, so unless we take action now, Thunder Bay will become a less affordable place to live vis-à-vis other cities in Ontario and it will make it more difficult to attract investments and people to move here.
To be fair, and provide a realistic assessment of the current financial situation, we need to acknowledge the substantial increase in infrastructure investment that went from $17 million to over $31 million per year, as well as the financial pressures that have built up in the last few years as a result of exceptionally harsh winter weather, legal challenges, and loss of taxable assessment with grain elevators now being designated commercial from industrial.
To deal with such negative impacts on the city’s finances, administration has initiated cost containment and lean programs aimed at finding saving internally. Council has also provided reductions of $200 for water and $200 for taxes to eligible low-income and disabled people and increased the eligibility amount.
At the same time however, new legislated programs and the need to address crime, accessibility, addiction and other socio-economic issues, the city has hired about 106 people in the last four years. This increase in staff (25% of which are paid for by outside agencies) and high wage increases in protective services, is putting tremendous pressure on budgets with wages and benefits now comprising over 70% of the total.
Given this scenario, what can Council do? I believe that we need to acknowledge the current challenges, only then we can move forward in addressing the corresponding issues in a proactive way. Tax increases and reduction in service alone cannot be the only answer and we need to renew our efforts in finding efficiencies and rethink the way we run the business of the city. The status quo is no longer sustainable and the taxpayers already know that.
It is becoming apparent that we need a longer-term vision.
Council will soon start deliberations on the new Strategic Plan and I believe that the time has come for a more proactive approach in managing our finances through a more direct tie-in between the strategic plan and the budget which should start much sooner and involve council at the early stages.
I am confident that we have the experience internally and do not need to spend money on new studies, and that the political will to move the City forward in a more sustainable way will be there.
Frank Pullia is a City of Thunder Bay Councilor and the Chair of Administrative Services Committee. He can be reached at 767-6579 or via e-mail at email@example.com Questions and comments are welcome.